All right, this is all about algorithmic day trading and your student makes up day trading and long
term investing.
So these are completely different things.
And let me briefly explain the differences.
So this is a brief overview.
And first of all, the purpose of day trading is generating current income.
So you start in the morning and in the best case, you end up with a profit of a couple of hundred dollars
and the evening.
And that's ordinary current income.
And the goal of long term investing is to accumulate wealth for the future, to have income during retirement.
And this leads to the time horizon, the time horizon of day trading is one day or even intraday.
So we start in the morning with no open positions.
And then during the day, we take a long and short positions.
And finally in the evening, we close our positions for the night.
And depending on the age of the investor, long term investing has a time horizon of 10 or even 50 years.
Now, coming to diversification, a long term investment portfolio is highly diversified with stocks,
bonds, commodities and more.
And here we clearly have a portfolio approach and decisions are made on the portfolio level, whereas
today trading doesn't require diversification and you can trade one or many instruments.
But typically the goal is to make profits on an instrument level.
Next Sunday trading, we can take long our short positions to benefit from rising and falling prices,
and the plan is actually to benefit from market inefficiencies.
So they trading assumes that we can at least partly forecast whether prices will rise or fall in the
next couple of minutes or hours and therefore the source of return thus far.
So the plan is to make profits no matter if we are in polar bear markets.
And in contrast to that, long term investing is typically a long only benefiting from a long term market
growth dividend and the price increases and therefore the primary source of returns this Beda.
Next, let's have a look at the instruments and the day trading, we typically invest into derivatives
like a CFD, so contracts for differences and this allows us to invest with the leverage and leverage
of 10 to 30 means that we only have to invest or deposit three to 10 percent of the actual investment
amount.
And you will see in the next elections in detail how this works.
And due to that Leveritt stay trading is a very risky business and small price changes can lead to high
losses.
And in contrast to that, the long term investments are typically physical investments.
So you buy physical stocks and half of the stocks in your portfolio, and that's typically no leverage
and long term investments.
So the risk is low to moderate because portfolios are highly diversified.
So these are the major differences between day trading and long term investing.
And sometimes a picture or image tells more than a thousand words.
And now let's have a look at typical Imagists or charts for day trading and also for long term investing.
So this is a typical chart for day trading.
It's a candlestick chart and we have some simple moving averages and more.
So this is a technical chart.
And each and every bar or candle here is just one or two minutes or five minutes.
So this is a very short term and one more time in long term investing.
We have a portfolio approach.
And it's not about finding the right portfolio in terms of risk and return that is appropriate for the
investor situation and for the investors risk appetite.
So this was a brief comparison of day trading versus the long term investing.
And again, this cost us all about day trading.
So algorithmic day trading.
Thanks for watching and to see you in the next Lexus by.